Page 2 - Cover Letter and Evaluation for Forrest Hoover

High-Deductible Plan F you would have to pay it until the deductible is met. But since all your
doctors accept Medicare-approved rates, this isn’t an issue.

You indicated that you would like to see comparisons of Medigap policies as well as Medicare
Advantage plans. Your evaluation compares two Medigap plans (Plan G and Plan HDF, which
you had mentioned in an e-mail that you are considering) and two Medicare Advantage plans --
one an HMO, the other a PPO.

Medigap policies

It might help to explain how Medigap policies work, including their strengths and weaknesses,
and the ways that they differ from Medicare Advantage plans. Medigap policies are
supplemental (or secondary) coverage. If you have a Medigap policy and go to the doctor, he or
she will send Medicare the bill. Then in most cases, Medicare will pay 80% of the approved
amount and forward the 20% balance to the Medigap insurer, who will pay some or all of the
balance, depending on the plan that you have.

From the patient’s perspective, this approach has several benefits. First, because Medicare
does not have networks, you can go to any provider who accepts Medicare, as 99% of doctors
and public hospitals do.

Second, Medicare makes the coverage decisions and not the insurance company. When
Medicare approves a procedure or treatment, the Medigap insurer cannot question the
decision. And Medicare is much more likely to approve some types of treatments than are
insurance companies.

Finally, if you have one of the comprehensive plans such as Plan G, you will rarely have any co-
payments, and most of the cost for Medicare-covered services will be in your premiums,
making it easy to predict your costs.

Another strong point is that Medigap policies are standardized and they rarely change their
benefit designs. And because the benefits are the same regardless of the insurance company
you buy your policy from, you can focus on premiums. Advantage plans, by contrast, often
change their benefit designs from one year to the next, and therefore you not only have to look
at the premium increases but also changes in the underlying benefit package.

The chief downside of Medigap policies is their cost. But by getting a less comprehensive plan
like Plan HDF, you will substantially reduce your premiums, although you will have a greater
out-of-pocket risk than in a comprehensive Medigap plan.

Medigap policies do not cover prescription drugs, and so if you get a policy you will also need to
enroll in a Part D stand-alone drug plan. Neither do Medigap policies cover routine dental and
vision care or hearing aids (but the two Advantage plans in your evaluation do have some
dental and vision benefits). See page 10 of the evaluation for more information on dental and

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